With Dasani Drops, Coca-Cola Looks to Flavor its Global Water Business

What is a beverage powerhouse to do when another company produces something that is going to eat into its market share? Attempt to crush it, of course.

Kraft introduced beverage drops called MiO last year, putting its marketing muscle behind a new water flavoring brand that created a new category and made the global snacks behemoth more than $100 million in the first half of 2012 alone, according to the Associated Press. So what is Coca-Cola going to do in the coming weeks? Launch Dasani Drops, described as “a zero-calorie liquid beverage enhancer that allows people to add a veritable burst of flavor to their water.”

The latest product from Coca-Cola’s water brand and PlantBottle innovator is more than just a tastier way to drink water (it’s described as “naturally flavored with other natural flavors”). The drops empower consumers to decide just how much flavoring they’d like, encouraging user interaction and customization — which is why Kraft called their product “MiO” (mine in Italian).

Four different flavors of Dasani Drops — Strawberry Kiwi, Pink Lemonade, Pineapple Coconut and Mixed Berry — will roll out in early October with more fruit flavorings expected next year (MiO offers nine flavors). And Coca-Cola has big plans for Dasani Drops — “I think there’s an opportunity beyond just flavored waters,” said John Roddey, VP of Coca-Cola’s water, tea and coffee business in North America.[more]

Innovating at Dasani is one part of Coke’s efforts in the next five years to spend $30 billion globally, according to the Atlanta Journal-Constitution. The Coca-Cola Company aims to double its revenue by 2020 when “more than two billion people around the world are expected to join the middle class or move from rural and farming areas into big cities,” the AJC reports. That would bring revenue up to around $200 million, making it a bigger moneymaker than the entire nations of Tuvalu and Kirabati, according to figures from the World Bank.

“We see a world unfolding over the next decade and beyond that presents ideal conditions for extraordinary growth of non-alcoholic, ready-to-drink beverages,” CEO and President Muhtar Kent told analysts, the Journal-Constitution reports.

Where there is Coke, of course, there is Pepsi. The AJC notes that this competition isn’t fading away on the global market; Pepsi is after all those dollars of the future, too. After all, half of its revenue in 2011 came from international sales. Still, Coca-Cola — Interbrand’s reigning Best Gobal Brand — is ahead of Pepsi on the international front: Beverage World estimates that Coca-Cola owns 53.1 percent of the world market while PepsiCo only has 21.7 percent.

Dasani Drops will be part of Coke’s assault on the rest of the world and whatever revenue comes in from them will be made thanks to the folks at Kraft, who hadn’t created a new category since 1995’s DiGiorno frozen pizza, according to FastCoDesign.com.

Kraft engineered a successful launch for MiO — and create a critical new category of product, no mean feat — by dusting off an old idea and assigning it to a small team of top-level execs to work with and adapt until it could find the proper consumer experience to help create a viable business. Now Coca-Cola’s hoping to do the same.